Childers v. Neely

49 L.R.A. 468, 34 S.E. 828, 47 W. Va. 70, 1899 W. Va. LEXIS 131
CourtWest Virginia Supreme Court
DecidedNovember 28, 1899
StatusPublished
Cited by35 cases

This text of 49 L.R.A. 468 (Childers v. Neely) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Childers v. Neely, 49 L.R.A. 468, 34 S.E. 828, 47 W. Va. 70, 1899 W. Va. LEXIS 131 (W. Va. 1899).

Opinion

BraNNON, Judge:

Childers and Ramey filed a bill in equity in the circuit court of Tyler against Neely, praying that a partnership between them be dissolved, an account taken “of all its accounts, dealings, and transactions whatever,” and that a manager be appointed to take charge of the property. The business was oil production. Neely admitted the joint [72]*72enterprise, but denied the partnership; and he joined in request for account, and did not resist a dissolution, if a partnership. The decrees made a partial account, decreed its balance against Neely, and denied him further participation, in the partnership and he appealed.

This case raises an interesting and important subject in this mining State; that is, whether, and when, joint tenants or tenants in common, jointly operating for oil, are partners, or merely co-owners. The bill asserts a partnership, while Neely denies it, asserting that it is a case, not of partnership, but co-ownership.

In two leases of town lots for oil and gas purposes, Childers owned one-fourth interest; Ramey, a three-eighth interest; Neely, a three-eighth interest. They were so far joint tenants. They agreed to develope the lots for oil, but made no w’ritten articles of partnership, in fact, no oral express formation of a partnership. They simply, by an indefinite understanding, agreed to develop their common property, each giving his skill, paying his share of outlay proportionate to his ownership, and getting his share of the product proportioned to such ownership. I use the word “product,” instead of “profits,” because there was no contract explicit in this point to distinguish product from profit. “Partnership must be distinguished from joint management of property owned in common. Where two partners own a chattel, and make a profit by the use of it, they are not partners without some special agreement which makes them so.” T. Pars. Partn. § 76. Two heirs or Other co-owners of a farm, jointly farming it for profit, are not partners. There is a peculiar partnership, called a “mining partnership, ” partaking partly of the nature of an ordinary trading or general partnership, on the one hand, and partly of a tenancy in common, on the other. It is an important question to those engaged in the oil and other mining business whether each one is jointly and severally liable for all the doings of every or any other of the associates in the yenture, as in ordinary trading partnerships. What is a mining partnership? 15 Am. & Eng. Enc. Law, p. 609, says: “When tenants in common of a mine unite and co-operate in working it, they constitute a mining partnership.” Many authorities there cited thus define it. See the California case of Skillman v. [73]*73Lachman, 83 Am. Dec. 96, and note discussing it fully; Lamar’s Ex’r v. Hale, 79 Va. 147. Mere co-working makes them partners, without special contract. Barring. & A. Mines & M. Courts of equity take jurisdiction of them as if general partnerships. 2 Colly, Partn. chapter 35. Of course, owners of mines, oil leases or farms can by agreement make an ordinary partnership therein; but “where tenants in common of mines dr oil leases or lands actually engage in working the same, and share, according to the interest of each, the profits and loss, the partnership relation subsists between them, though there is no express agreement between them to be partners or to share profits and loss.” Duryea v. Burt, 28 Cal. 569. The presumption in such case would be that of a mining partnership, rather than an ordinary one, in absence of an express agreement forming an ordinary general partnership. Perhaps the case of Bank v. Osborne, 159 Pa. St. 10, 28 Atl. 163, and other cases in that state cited in Bryan, Petroleum & Natural Gas, 283, would justify the inference that the parties operated as tenants in common; but the current of authority elsewhere recognizes the inference of mining partnerships. That state does not recognize such a partnership. Justice Field said in Kahn v. Smelting Co., 102 U. S. 645, 26 L. Ed. 266; “Mining partnerships, as distinct associations, with different rights and liabilities attaching to their members from those attaching to members of ordinary partnerships, exist in all mining communties. Indeed, without them successful mining would be attended with difficulties and embarrassments much greater that at present. ” One leading distinction between the mining partnership and the general one is that the general one has, as a material element of its membership, a delectus joersonce (choice of person), while the other has not. Those forming an ordinary partnership select the persons to form it, always from fitness, worthiness of personal confidence; but we know such is not always or often the case in oil ventures. It is because of this delectus fersoncB that the law gives such wide authority of one member to bind another by contracts, by notes, and otherwise. One is the chosen agent of the other. Hence, when one member dies or is bankrupt, or sells his interest to a stranger, even to an associate, the partnership is closed) [74]*74one chosen member is gone, the union broken, because he may have been the chief dependence for success, and the newcomer may be an unacceptable person, who would entail failure upon the firm. In the mining partnership, those occurences make no dissolution, but the others go on; and, in case a stranger ‘has bought the interest of a member, the stranger takes the place of him who sold his interest, and cannot be excluded. If death, insolvency, or sale were to close up vast mining enterprises, in which many persons and large interests participate, it would entail disastrous consequences. From the absence of this delectus persones in mining companies flows another result, distinguishing them from the common partnership, and that is a more limited authority in the individual member to bind the others to pecuniary liability. He cannot borrow money or execute notes or accept bills of exchange binding the partnership or its members, unless it is shown that he had authority; nor cana general superintendent or manager. They can only bind the partnership for such things as are necessary in the transaction of the particular business, and are usual in such business. Charles v. Eshleman, 5 Colo. 107; Skillman v. Lachman, 83 Am. Dec. 96, and note; McConnell v. Denver, 35 Cal. 365; Jones v. Clark, 42 Cal. 181; Manville v. Parks, 7 Colo. 128, 2 Pac. 212; Congdon v. Olds, 18 Mont. 487, 46 Pac. 261; Judge v. Braswell, 13 Bush. 67; Waldron v. Hughes, 44 W. Va. 126, (29 S. E. 505). In fact, it is a rule that a nontrading partnership, as distinguished from a trading commercial firm, does not confer the same authority by implication on its members to bind the firm; as, e. g. a partneiship to run a theatre or other single enterprise only. Pease v. Cole, 53 Conn. 53, 22 Atl. 681; Deardorf's Adm’r v. Thacher, 78 Mo. 128; Smith, Merc. Law, 82; T. Par. Partn. § 85; Pooley v. Whitmere, 27 Am. Rep. 733. A mining partnership is a nontrading partnership, and its members are limited to expenditures necessary and usual in the particular business. Bates, Partn. § 329. Members of a mining partnership, holding the major portion of property, have power to do what may be necessary and proper for carrying on the business, and control the work, in case all cannot agree, provided the exercise of such power is necessary [75]*75and proper for carrying on the enterprise for the benefit of all concerned. Dougherty v.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Sugar Rock, Inc. v. D. Michael Washburn
787 S.E.2d 618 (West Virginia Supreme Court, 2016)
Clifton G. Valentine v. Sugar Rock, Inc. and Gerald D. and Teresa D. Hall
766 S.E.2d 785 (West Virginia Supreme Court, 2014)
Clifton Valentine v. Sugar Rock, Inc.
745 F.3d 729 (Fourth Circuit, 2014)
Long Island Lighting Co. v. Bokum Resources Corp.
40 B.R. 274 (D. New Mexico, 1983)
Bush 1 c/o Stonestreet Lands Co. v. Commissioner
48 T.C. 218 (U.S. Tax Court, 1967)
State v. Elsbury
175 P.2d 430 (Nevada Supreme Court, 1946)
Kinne v. Duncan
43 N.E.2d 425 (Appellate Court of Illinois, 1942)
Elder v. Tucker
178 S.E. 629 (West Virginia Supreme Court, 1935)
Park v. Adams
173 S.E. 785 (West Virginia Supreme Court, 1934)
Dana v. Searight
47 F.2d 38 (Tenth Circuit, 1931)
Schmidt v. Horton
287 P. 274 (Nevada Supreme Court, 1930)
Gilbert v. Fontaine
22 F.2d 657 (Eighth Circuit, 1927)
Manufacturers Light & Heat Co. v. Tenant
139 S.E. 706 (West Virginia Supreme Court, 1927)
Thompson v. Crystal Springs Bank
21 F.2d 602 (Eighth Circuit, 1927)
State Ex Rel. Cole v. District Court
254 P. 863 (Montana Supreme Court, 1927)
Outram, Trustee v. Hudson and Collins
290 S.W. 1031 (Court of Appeals of Kentucky (pre-1976), 1927)
Munsey v. Mills & Garitty
283 S.W. 754 (Texas Supreme Court, 1926)
Munsey v. Mills & Garitty
283 S.W. 751 (Texas Commission of Appeals, 1926)
Vaughan v. Vaughan
133 S.E. 158 (West Virginia Supreme Court, 1926)
Sturm v. Ulrich
10 F.2d 9 (Eighth Circuit, 1925)

Cite This Page — Counsel Stack

Bluebook (online)
49 L.R.A. 468, 34 S.E. 828, 47 W. Va. 70, 1899 W. Va. LEXIS 131, Counsel Stack Legal Research, https://law.counselstack.com/opinion/childers-v-neely-wva-1899.